Hedge Funds Boosting ETF Growth

New York (HedgeCoVest.Com)- In the HedgeCoVest newsletter three weeks ago, we featured an article entitled Assets in ETFs to Surpass Hedge Funds This Quarter. One of the issues that we brought up in that article was a question of how much hedge funds might be boosting the asset growth in the ETF industry. Last week, two separate reports came out that give a little glimpse as to how much hedge funds deal in ETFs.

The first report comes from Benzinga.com and features data regarding Ray Dalio’s Bridewater Associates. According to the article, the top three holdings are the Vanguard Emerging Markets Index Fund (NYSE: VWO), the SPDR S&P 5oo ETF Trust (NYSE: SPY) and the iShares MSCI Emerging Markets Index (NYSE: EEM). The combined value of these three investments represents $11 billion in the fund.

The second report came from ETFTrends.com and it showed information about David Tepper’s Appaloosa Management LP. According to the report, Appaloosa added to two major ETF holdings during the first quarter: the PowerShares QQQ (Nasdaq: QQQ) and the SPDR S&P 500 ETF Trust (NYSE: SPY). This brought Appaloosa’s holdings in the QQQ to $413 million and in the SPY the holdings are now at $934 million.

Another interesting tidbit from the ETFTrends report is that almost 1,400 13 filers count the SPY among their top 10 holdings, or at least they did at the end of the first quarter. The ETF industry may be making a big deal out of the fact that assets in ETFs are about to surpass those in hedge funds, but it looks like hedge funds are a big reason for the growth.

Rick Pendergraft
Research Analyst

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